While the pressure from residual Dollar strength appears to be waning, the Euro wasn’t able to add to itsbull case through scheduled data overnight. In fact, Euro zone construction activity in September declined bynearly 2% and that probably adds some overhead resistance on the Euro charts today. However, the Dollar has avulnerable feel and any hint of a push back in US rate hike timing from the FOMC meeting minutes could be justthe catalyst to send the December Euro back above the 1.26 level in the coming trading sessions. The bulls havean edge but we don’t like paying up for a currency that is already seen a moderate short covering bounce.
Technical Outlook: Stochastics are at mid-range but trending higher, which should reinforce a move higherif resistance levels are taken out. The cross over and close above the 18-day moving average indicates theintermediate-term trend has turned up. The daily closing price reversal up is a positive indicator that could supporthigher prices. A positive setup occurred with the close over the 1st swing resistance. The near-term upside targetis at 126.2125. The next area of resistance is around 125.9150 and 126.2125, while 1st support hits today at124.8850 and below there at 124.1525.